Archive for November, 2014

If you work for a recruiting firm, or in Human Resources, there is no question that you are familiar with what a “passive candidate” is and how sought after they are. I was recently reading an article about passive candidates that proclaimed in a survey that 25% of the global workforce are currently seeking a new opportunity. 45% of them are open to speaking to a recruiter about a new opportunity and 15% are currently engaging in networking to see what else is on the horizon. Only 15% state they are not interested in a new job. To the recruiter, that means there is 60% of the workforce that will not likely see any job postings because they aren’t looking in that direction. You also have to wonder how many of the 25% of “active candidates” in the workforce will miss your job posting because they get busy at work and miss a few days or weeks of searching.

I thought it was a good article and decided to read some of the comments. Most seemed to agree with my thoughts about the information presented but one person stated that all he hears about is how great a passive candidate is, but has never understood or had someone explain why that is.

Here is my opinion on the matter. Passive candidates “could” be better than your typical active candidate, the person that is actively seeking a new opportunity, for a couple of reasons:

First….they are working. That means that during a company’s ups and downs, that candidate is still employed and being successful. Most companies would covet that person. And why wouldn’t they? If you have 2 candidates with equal education and experience, who would you rather have? The person currently producing and likely either making/saving money for their current organization or the person that is searching for the next opportunity because they were about to be or were recently laid off from their last employer? Even if they are still working, the person actively looking is doing so for a reason and for all you know it is because they know they are underperforming.

The second reason is simple. EVERYONE is recruiting the active candidates. As a recruiter you are competing with many other opportunities for the same person, or competing with many other recruiting firms for the same opportunity. Since most recruiting firms work on a contingency basis, that means there could be a lot of work for ultimately no money. The passive candidates that are out there may have been called a few times regarding other opportunities but your chances of competing with another opportunity at that time, or even with another recruiting firm for the same opportunity, goes down significantly.

Remember, I said that passive candidates “could” be better than your typical active candidate. What I didn’t say is that they are better 100% of the time. Why? Because that wouldn’t be true. While there is certainly a chance that a candidate is searching for a new opportunity because they are about to get fired for underperforming, there is also a likelihood that they just need a better situation for themselves. They might need more money, a better work/life balance or better growth opportunities. In the end there is definitely a possibility that the active candidate can be just as strong for a position as a passive candidate.

To sum it up, no one is saying that the passive candidate is unequivocally the better candidate to target 100% of the time. But if dozens of recruiting firms are talking to the same candidates currently searching for a new opportunity, wouldn’t it be wise to start looking for fresh candidates? And where would you find those candidates? That’s right, at work. That’s why companies that have the ability and experience to identify and source passive candidates will ultimately have a leg up on other staffing agencies.

Many organizations today have moved to more of a “try before you buy” philosophy. What I mean is they are hiring people on a contract basis, usually anywhere from a month to a year, to determine if that person would be a good fit for their organization long term.

As you may know, the process of onboarding a new employee is not cheap. There are taxes, insurance and benefits that have to be accounted for and it can be quite expensive. What if your new hire finds a higher paying job in a month or doesn’t work out for whatever reason? Yep, you are back to square one and will have to incur all those costs all over again when you find the replacement.

With contractors you have the chance to avoid those costs while obtaining talent to perform the duties that need to be completed. The other “cost” that comes into play is the cost you incur for every week, day and hour that the position is not filled. You are missing out on productivity which in turn means you are missing out on either money earned or money saved.

Are there any perceived downfalls to using a contractor? Sure there are. It may take 2 or 3 hires before you find the one that fits your long term goals. Another perceived downfall is that you will need to pay a higher hourly rate for a contractor than you would a permanent employee. This is done to make the position attractive and to offset the fact the potential contractor will have to pay for their own health insurance and they do not receive any PTO. Also, if you used a recruiting firm to find this contractor, then they have to make money as well.

The question becomes how much money will be lost by not having this position filled, plus all the costs and resources to find someone, compared to what you have to pay in an hourly rate. In most cases the contractor route is cheaper in the long run.

With all that said, contracting employees is not for everyone in every position. But if your recruiting strategy is coming up short on a need-to-fill position, consider engaging in a recruiting firm to discuss this option.

Think about it, wouldn’t it be nice if you could always “try before you buy” any product or service that is out there?